The Vanguard is going to approach the water ballot initiative from two perspectives – the first is to provide the public with as much information as possible about the project, the rates and other critical issues. The other is to act as a fact checker – for both sides, to make sure that what information is in the public view is as accurate as possible.
He begins, “All I know is the recommendation the WAC made to the City Council about water rates is confusing in the extreme, even in a town where half the town has a Ph.D. and the other half thinks it should.”
This is a critical issue – how well people can understand the water rates and how long it will take the average person to have them explained. We have already had some councilmembers express concern about the complexity of the rates, while others believe that the rates are relatively straightforward.
More than any issue, aside from the core project, the complexity of the rates may be the reason that this measure rises or falls.
Mr. Dunning adds, “The plan is one of those only-in-Davis, first-in-the-nation things that makes me wonder if it was adopted for its rationale or simply because it allows our town to stake another claim to worldwide greatness … I’m not sure I want to be a guinea pig when it comes to the cost of water … my fear is fueled by one committee member who said ‘This is Davis. This is something for us to do, something innovative, and if someone is going to innovate this type of reform, I think that we should be the ones to do it.’ … with all due respect to innovation and to being first on the planet to institute a water rate structure no one else has dreamed of, I’d much prefer fair and affordable when it comes to my family’s water bill … save your experiments for the Primate Center …”
Here I think Mr. Dunning is off base. The reason that the proposed rates were developed by Frank Loge and Matt Williams was in trying to produce a rate structure that is fair to the lower-end customers and to figure out an appropriate way to transfer fixed costs in a fair and equitable manner. This rate structure also produces significantly more fiscal stability for the water agency, so that the agency doesn’t have to come back to the ratepayers for more increases as a result of reduced use.
Bear in mind that Attorney Kelly Salt and other city staffers initially were extremely skeptical of this proposal. However, on Thursday, the work and revisions by Mr. Williams won over Ms. Salt, Harriet Steiner and the staff members I have talked to.
Ms. Salt writes in her legal opinion provided to the city, “I am comfortable with the revised Loge-Williams rate model that Mr. Williams has prepared and that you have described in the draft Prop 218 notice. Of particular importance to me is that this new rate structure includes and identifies a rate that will be imposed for each component of the water service fees.”
Mr. Dunning continues, “One huge drawback to the WAC approved plan the council will now grapple with is that the fixed-rate portion of your bill will be based on the previous year, which significantly discourages conservation because no matter how much you cut back, your rate is based strictly on what you used last year if you had a particularly bad year water wise.”
This is an interesting point. But first of all remember that, prior to this rate structure, the fixed portion previously was completely based on meter size, and no amount of conservation would reduce the fees associated with those meters.
I don’t know how you can argue that this discourages conservation – if anything it will encourage conservation because, after the first year, your new CBFR will be calculated on this year’s usage. So if you use less this year, not only does your variable usage cost go down but so too will next year’s CBFR.
So, contrary to Mr. Dunning’s argument, there is actually a twofold incentive to conserve, to reduce current charges and future charges.
Mr. Dunning continues: “The plan dramatically reduces the amount of water a household may use before moving into the punitive tier system, where the cost of water spikes considerably … the plan does not take into account household size before beginning the punishment.”
Bob Dunning has a valid point here, in that the proposed rate has reduced the tier break. Presently the tier break between Tier 1 and Tier 2 is 18 ccf and that level is also considered standard. Modifying that tier break may address Mr. Dunning’s concern while preserving the rest of the structure.
Matt Williams argues that the Loge-Williams model does take into account household size. He notes that, under the old rate structure, the tier structure accounts for 70% of the entire rate. In the current structure, that tiered proposal has been reduced to just 15% of the total water bill.
Under the structure of the CBFR Fee, every person pays the exact same amount per dollar per gallon. Therefore, Mr. Williams argues that the current rate structure is far more proportional than the previous rate structure.
Mr. Dunning argues that “simple fairness – not to mention the 14th Amendment to the U.S. Constitution – demands that each citizen of this town should have the right to a basic amount of water for regular daily needs at the exact same price every other citizen of this town is charged … tiers, meant to punish water wasters, should never be instituted before household size is taken into account … with the unreasonably low threshold for moving a household into Tier II ratepayers’ hell, large families or those who have taken in foster children or an ailing relative, will automatically be paying more per gallon than their neighbors, no matter how much they conserve.”
It is additionally worth noting, at least, that the most likely culprit for high water use is not going to be additional people in the household. While those people will account for more showers and toilet flushing, they will only contribute marginally to more dish washing and more clothes washing. The biggest user of water is not the additional person, but rather outdoor irrigation.
So it’s not altogether clear if and how much more a larger household is going to pay than a smaller one.
Mr. Dunning is correct that a gallon is a gallon, but the real question is how much of the infrastructure costs higher-end users should pay in proportion to lower-end users.
This is the problem that Matt Williams is actually trying to fix. He notes, “In the rate system that Bob appears to support, a ratepayer who used 51 hundred cubic foot units (ccf) per year in 2011 paid $2.71 per ccf, while a ratepayer who used 600 times that amount (3,040 ccf) paid only 5 cents per ccf. Yes, you read that correctly … literally thousands of Davis ratepayers paid 600 times more per unit than other Davis ratepayers did.”
He argues, “What Bob is saying, in effect, is that four groups of Davis citizens should make recurring annual charitable donations to the large water users here in Davis. Those four groups are 1) senior citizens, 2) low-income residents, 3) residents who have unfortunately lost their jobs in this down economy and 4) residents who have worked hard to conserve water.”
Bob Dunning argues, “But this system adds a penalty to the second group, under the presumption that they’re water wasters.” But it’s far from clear that it actually does.
This is an argument that will obviously be revisited a number of times during the campaign. But for now, I think, we need to look at how much additional water each additional person adds to a household and whether that additional water usage can be mitigated through conservation.
—David M. Greenwald reporting
Water is water and i am not sure I am in favor of giving a large household a break on the water just as I am not in favor of giving someone with a large lawn a break. I like the fact that if we conserve, we save.
Oh no, we’ve gone national! Now we have our very own Nate Silver, er … wait … local fact checker. Let the checking begin!
The BWA rate system seems a bit more familiar than the W & L rate system, but let’s see the expanded justifications and analysis. The WAC tried hard at their last meeting, but clearly they were rushed, again, by command of the CC.
Maybe there needs to be dualing Op Ed pieces or something? I’ll happily take a seat in the audience.
If I were summarizing Bob Dunning’s water rate policy, it would be based on these two statements he’s made to me:
“Everyone should pay the same amount per gallon used.
Tiers should be used for water wasters only.”
Thus Tier 2 would start at a higher point, based on a consensus definition of ‘water waster’. Presumably, that means the per-gallon rate in Tier 1 would have to be higher.
Bob has a very good point – that a gallon of water should be charged the same for everyone, regardless of where they live. One tier. I suppose we could then ration water by setting a level that we don’t want people to exceed and, if they do, charge an exorbitant rate for that. But for normal, average use by residential customers – one rate per gallon of water.
Commercial accounts can use the Loge-Williams rates to encourage conservation.
Ryan: good comments, but I think that Prop 218 forbids the distinction between commercial and residential and irrigation. That was the holding of the City of Palmdae decision in August 2011. You can get the case briefs on the LA COunty Superior Court docket if you care to see them.
Of course, not to kick the bee hive of pro-JPA’ers who reside on this Blog, but I just have to say that our very own City Attorney has claimed in writing that the City of Palmdale does not apply to our situation. And toads can fly ….
Anyone care to comment on the third motion at the WAC: the one by Bill Kopper. I heard it, but never saw it written out, so I dont know how that might apply here. He got some good votes on his motion, and I believe that Jerry Adler supported it (??), but it was at the end of a 3 hour slugfest at the WAC and I never really figured out the net effect of what Kopper was trying to do with it.
The CC can pick that route, too, next week. Or none of the three, and do a Fusion Rate. Now, that would be trendy?
Headlines on the DV and DE media sites: “On November 27th, The City of Davis opted out of the traditional BWA tiers, rejected the novel W-L Rate System, and went with the Kopper Fusion Package.”
You just have to love this town. I do.
I do not hold to the belief that a business or a corporation is a person. Apparently, Mike does. Bob’s point was that every person should pay the same for their consumption of water, regardless of their living situation. If it is illegal to have a distinction between people living in a home and a commercial operation, then the punitive tier would have to be set so that doesn’t put undue burden on commercial use. It still could be done.
One tier – that still is the only way to be truly fair.
the question i have for people who argue one tier is the only way to be truly fair – do you know that every gallon of water has an equal impact on the fixed costs of the system?
Not sure. Why would it not? If there is a different impact, i.e. meter size, then can’t the difference be charged to offset the impact and leave the price per gallon alone?
you’re assuming there is a linear effect between usage and taxing the system, but what if it’s instead exponential or at the very least curvilinear? if that’s the case, a gallon is not a gallon and the entire premise falls apart.
Yes, I suppose. But, Mike has made it very clear that he believes that the consumers of the largest amount of water (commercial operations) cannot be charged differently than a person. If there is indeed a linear affect between usage and taxing the system, then rates for the highest levels of consumption could be set, i.e. Loge-Williams. Or there could be multiple tiers at the highest levels of use. But, people should be allowed to buy water for their own personal use at the same rate as all other individuals regardless of where or how they live.
Ryan: you actually get at an interesting point. Pursuant to California law, the public has a right to potable water at affordable rates for personal use. We’re citing that law in the initiative, and putting it into the Davis code.
This water project study process over the past year is going to end up with the large irrigators re-plumbing to use shallow aquifer water that has not been treated for drinking, and many of the smaller users actually paying less. Right now, such smaller users heavily subsidize the larger users of potable water.
The referendum/WAC/further argument with Woodland on pro rata sharing has saved the Davis ratepayers a bundle so far, but we believe greater savings are still to be had. And, we want the City to learn to follow a specific process for this and future projects. It’s a utilities “Measure J/R.”
If it is already CA law, why put it into Municipal Code? Also, “affordable” is so vague and a designed to appeal to people’s emotions and divert attention away from the real issue that needs to be considered.
Ryan: you can come by and look at a draft before we file it if you are interested in offering constructive feedback. We don’t claim a copyright on this.
Alf: same offer to you, since we know your interest in all things water.
Bob Dunning makes a good point about not basing usage on the previous year, unless there are exceptions for good cause.
If you buy a house that was vacant the prior year, you should not be penalized for normal water usage.
eagle eye, there will always be exception circumstances that will need to be handled. Not too many houses in Davis stand vacant, but if they did their prior actual usage would be lower than normal not higher. That would benefit the new owner, not disadvantage them.
It is worth noting that when I was doing homework on the best way to wrestle with the issues core to our rate solution, I met with Becky King of King Properties, who handles the lion’s share of single family home rentals in Davis. I was directed to her to see if there would be a problem for rental turnovers in the way we were designing our rate structure. She said that she has effectively been using the same system for passing through the water costs to renters for almost ten years. The water bills come to the rental property owners not to the tenants, and she collects the water bill money from the tenants. To help the renters budget their water expenses she shares with them the past usage/consumption information and then sets the bi-monthly payment level based on that history. Once the actual bills arrive showing the new tenant’s actual usage, she validates that the actual amount due for water and what has been paid are in alignment, and if they are not, either issues a refund check or requests a supplemental payment. Her experience is that like taxes, everyone wants to get a refund rather than having to come up with a supplemental payment, so they always prefer the initial bills to be on the high side to ensure that it will be a refund that comes to them.